Parking, Real Estate
Why Are City Parking Lots Empty?
Friday, May 28, 2021 - 4 min
North American cities have a parking lot problem. And while finding parking can still be a challenge without using an app, the problem isn’t too few spots—it’s that there are far too many.
… for every American car, there may be as many as eight parking spaces.
Research suggests that for every American car, there may be as many as eight parking spaces. In Los Angeles County, for example, there is more space for cars to park than there is space for people to live. And in Chicago, parking facilities for apartments and condos are typically only two-thirds full, with occupancy falling even further the closer those buildings are to transit.
But why are there so many empty spaces—and how can they be put to better use? The problem starts with minimum parking requirements—and ends with REEF.
Where did minimum parking requirements come from?
Minimum parking requirements are laws that state all new buildings must include a set number of off-street-parking spaces. This is based on the assumption that people using the building will need access to parking.
Minimum parking requirements first emerged in the early 1950s, as cities and suburbs began to grow. One of the side effects of that expansion was a rapid increase in the number of cars. As people began driving more frequently, finding places to park became more important. City planners and politicians turned to minimum parking requirements to ensure that new developments would include parking spaces and not make the parking shortage worse.
Wasted space: how minimum parking requirements affect communities and cities
Today, minimum parking requirements have left many North American cities with too much off-street parking. Take Detroit as an example: even though the city’s population has fallen by half in recent years, approximately 40% of downtown land is devoted to parking cars. Imagine if that land was used for essential services instead. Detroit isn’t alone: Edmonton has approximately 50% more off-street parking than needed.
How does this happen? Because minimum parking requirements tend to be “one size fits all,” they rarely address a community’s specific needs. As a result, valuable real estate often isn’t used in ways that are best for the community or the property owner.
The problem for property owners
Minimum parking requirements are mandated by the local government—but it’s the property owner who is responsible for all the costs associated with a parking lot’s construction. It’s estimated that an underground parking spot costs the property owner $34,000 to construct, while an above-ground spot costs $24,000.
Once the parking lot is built, the property owner continues to finance its maintenance and upkeep. Staffing, cleaning, re-striping, filling potholes, sealcoating, clearing snow, and landscaping: the costs add up.
Some property owners try to offset these costs by implementing paid parking. Others are unable to do this due to local zoning ordinances, which mandate a certain level of free parking. In either case, parking spots remain empty if consumer demand isn’t there.
We think that’s a waste of space. Don’t you?
Luckily, we’ve created ways for property owners to offset the costs of owning a parking lot, create a reliable passive income stream, and make the surrounding community a better place to live.
How does REEF help?
REEF is North America’s largest parking management provider, and we’ve navigated the regulatory framework surrounding parking minimums for decades. We know where opportunities are ripe for conversion from free parking to paid parking and deliver asset management solutions that grow property owners’ bottom lines.
But we also know that not all spaces can be converted to paid parking. So, what can we do when free parking spaces sit empty?
REEF introduces income-generating business applications to empty spaces—like parking lots. Each use case is designed to improve the property’s income, contribute to its value, and create new jobs and opportunities for the community.
Here’s how it works:
- We identify which products, services, and experiences the surrounding community needs the most. This could be foundational—like more healthcare options—or as simple (and delicious) as a new food delivery option.
- We activate and manage modular business applications (e.g., a healthcare micro-clinic, a delivery-only kitchen) at no cost to the property owner. Our launch team take care of the permitting, insurance, and utility requirements as we go.
- Each application introduces 5-8 new jobs to the community and provides the property owner with immediate and ongoing passive income.
We think it’s a win for everyone. Property owners can make more passive income. The community gets more of what they actually need. And cities have a low-cost, low-impact way to create complete communities and 15-minute neighborhoods.
Would you like to learn how much passive income your property could make with REEF as your turnkey tenant? Use our income calculator.
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REEF is here to help.